Bitcoin ATM goes live in Albuquerque, more coming to Austin and Seattle

Exchange bitcoins for cash, and vice versa.

Today a maker of Bitcoin ATMs claimed that it launched the US' first such machine in Albuquerque, New Mexico.

The maker of the machines, Lamassu, says on its website that users can purchase bitcoins by scanning a bitcoin QR code and inserting cash. The machine, which costs $5,000, "accepts notes from over 200 countries" and is "compatible with leading exchanges, such as Mt. Gox and Bitstamp."

Bitcoin machines that allow both purchasing bitcoins and swapping bitcoins for US dollars are coming from another company called Robocoin. That company has said it will install its machines in Seattle and Austin next month, Reuters reported today.

"The kiosks... are similar to ATMs but have scanners to read government-issued identification such as a driver's license or a passport to confirm users' identities," Reuters wrote. "The ATMs will allow people to swap Bitcoin for cash, or deposit cash to buy more Bitcoin by transferring funds to or from a virtual wallet on their smartphones."

Robocoin's website shows the interface users can expect to see when making Bitcoin transactions:

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

After jumping through a couple links, it looks like this is inside a cigar bar up on Nob Hill, haven't been in that part of town in quite a while, but its trying really hard to be fancy up there. All in all, not my part of town.

Albuquerquean here, this is honestly one of the most random places to put it. Looking around I found that it's at Imbibe, which is a upscale (read: really pretentious) cigar bar/dance club. I wonder if you have to meet their dress code to use it.

Im going to go buy a bitcoin right now. Its a few blocks form me. If anyone else lives out here, its at Imbibe on Nob Hill.Edit: Also, the one in ABQ is dissimilar from the actual bitcoin ATMS they are planning.Contrary to what is says in the article, this one dispenses bitcoins for cash only. No cash for bitcoins.

What a great idea, lets take the anonymous aspect of something, and make it completely trackable.

I'm on board on this idea 100% </s>

This is how the economy eats Bitcoin for lunch. Not by using it, but by trying to make it so commercially viable that its nothing more than a line of credit that can fluctuate because its now tied to you completely.

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

It's a complicated system and a lot of articles are taking liberties in summarizing how it works. When a transaction order is issued (so, for example, when this machine receives cash and decides to send you bitcoins) it gets sent to every bitcoin client that the sender knows, and that's a list that gets shared around the bitcoin network. If your phone's client is on that list, you'll see it immediately. If not, it may take a few minutes for your client to see the transaction, but it's still going to be very quick.

Where the "can take an hour" comes from is the verification step. Especially with thin clients (that don't keep a copy of the entire Bitcoin ledger), your wallet has no way of knowing if that transaction is valid. Did the sender have the coins to spend? What if the sender sends its entire balance to 100 different people at the same time? The Bitcoin mining you hear about is devoted to solving those problems: miners will discard invalid transactions and then combine the recent valid ones into a block. Each of those transactions gets combined mathematically, then a big number is added to it, then it gets hashed with SHA-1, and out comes a valid transaction solution that starts with a bunch of zeroes. Finding that big number is the work that miners do, guessing and hashing until they get an output that starts with a bunch of zeros, and they get rewarded with Bitcoins. So in the case of sending your entire wallet balance to 100 people, some miners may start guessing with one transaction as valid and other miners may start guessing with another transaction as valid. Whoever finds the right big number first has effectively decided where those Bitcoins went.

The number of zeros that the solution needs to start with is the mining difficulty, and it increases every 2 weeks to try and keep the average time to find a solution around 10 minutes. Now, it's theoretically possible for someone (Bad Guy) to send the same Bitcoins to 2 people, let it get verified as going to person A (and presumably then get some service from person A like cash or physical goods), then devote his mining hardware to verifying the transaction to person B. The network treats the longest blockchain (history of these verifications) as valid, so to do this attack Bad Guy would have to find a new big number that would solve the equation for the transaction to person B, and then also find the next block, all before the rest of the network found a block building upon the transaction to Person A. If the Bad Guy could do that, the network would think his transaction to Person B is the valid one. That's the "51% attack" on Bitcoin, since you'd effectively need to control 51% of the miners to make it happen. Early on, many people decided that waiting until a transaction was 6 blocks deep was a good rule of thumb for avoiding this scam, since at that point the chance is effectively zero of someone with a whole lot of miners guessing the correct big numbers to make a new, longer block chain without that transaction. At 1 block/10 minutes, that's where the 1 hour verification comes from.

But if you're at this ATM with your smartphone trying to turn your $20 into some Bitcoins, you'll see the transaction immediately and can walk away without any issue. In 10 minutes, you'll probably see the transaction has made it onto the blockchain, and as you wait longer it'll get more verifications. If it doesn't, then waiting around the ATM isn't going to make your situation any better; at that point it's time to call whoever owns that thing and try to get your cash back.

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

[... explanation ...]

But if you're at this ATM with your smartphone trying to turn your $20 into some Bitcoins, you'll see the transaction immediately and can walk away without any issue. In 10 minutes, you'll probably see the transaction has made it onto the blockchain, and as you wait longer it'll get more verifications. If it doesn't, then waiting around the ATM isn't going to make your situation any better; at that point it's time to call whoever owns that thing and try to get your cash back.

But what about the other direction: you're at the ATM with your phone/QR code, and ask for cash (in dollars, presumably). How long do you need to wait until the ATM decides it's certain that you really own the bitcoin you're trying to cash in?

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

[... explanation ...]

But if you're at this ATM with your smartphone trying to turn your $20 into some Bitcoins, you'll see the transaction immediately and can walk away without any issue. In 10 minutes, you'll probably see the transaction has made it onto the blockchain, and as you wait longer it'll get more verifications. If it doesn't, then waiting around the ATM isn't going to make your situation any better; at that point it's time to call whoever owns that thing and try to get your cash back.

But what about the other direction: you're at the ATM with your phone/QR code, and ask for cash (in dollars, presumably). How long do you need to wait until the ATM decides it's certain that you really own the bitcoin you're trying to cash in?

Indeed. Presumably the ATM has at least a 10 minute delay between accepting BTC and spitting out your money? Otherwise it would seem to be trivially succeptible to double-spend attacks.

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

[... explanation ...]

But if you're at this ATM with your smartphone trying to turn your $20 into some Bitcoins, you'll see the transaction immediately and can walk away without any issue. In 10 minutes, you'll probably see the transaction has made it onto the blockchain, and as you wait longer it'll get more verifications. If it doesn't, then waiting around the ATM isn't going to make your situation any better; at that point it's time to call whoever owns that thing and try to get your cash back.

But what about the other direction: you're at the ATM with your phone/QR code, and ask for cash (in dollars, presumably). How long do you need to wait until the ATM decides it's certain that you really own the bitcoin you're trying to cash in?

Indeed. Presumably the ATM has at least a 10 minute delay between accepting BTC and spitting out your money? Otherwise it would seem to be trivially succeptible to double-spend attacks.

The Lamassu machine in Albuquerque does not convert bitcoins to cash, only cash to bitcoins. It won't do a 2-way transaction. Honestly, I don't see why anyone would want to covert BTC to US$ if the vendor (in this case, the bar) accepts bitcoin.

The Robocoin machine in Vancouver can do two-way transactions. If you compare photos of the two machines, you'll note that the Lamassu is much smaller and has a simpler user interface. The Robocoin is the size of a large vending machine, and generates a paper wallet for your coins if you don't have a smartphone wallet.

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

[... explanation ...]

But if you're at this ATM with your smartphone trying to turn your $20 into some Bitcoins, you'll see the transaction immediately and can walk away without any issue. In 10 minutes, you'll probably see the transaction has made it onto the blockchain, and as you wait longer it'll get more verifications. If it doesn't, then waiting around the ATM isn't going to make your situation any better; at that point it's time to call whoever owns that thing and try to get your cash back.

But what about the other direction: you're at the ATM with your phone/QR code, and ask for cash (in dollars, presumably). How long do you need to wait until the ATM decides it's certain that you really own the bitcoin you're trying to cash in?

Indeed. Presumably the ATM has at least a 10 minute delay between accepting BTC and spitting out your money? Otherwise it would seem to be trivially succeptible to double-spend attacks.

That is correct. The Robocoin machine that allows you to sell Bitcoins for cash gives you a receipt to be redeemed after some time, and this machine doesn't let you sell Bitcoins.

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

Transaction fees speed up the process.

Transaction fees increase the likelihood that the miners will include your transaction in the block that they calculate (since the miner who finds the big number needed to validate the transaction gets to keep all fees attached to transactions he/she validates) but it's still going to take about 10 minutes per block multiplied by the number of validations the recipient requires.

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

[... explanation ...]

But if you're at this ATM with your smartphone trying to turn your $20 into some Bitcoins, you'll see the transaction immediately and can walk away without any issue. In 10 minutes, you'll probably see the transaction has made it onto the blockchain, and as you wait longer it'll get more verifications. If it doesn't, then waiting around the ATM isn't going to make your situation any better; at that point it's time to call whoever owns that thing and try to get your cash back.

But what about the other direction: you're at the ATM with your phone/QR code, and ask for cash (in dollars, presumably). How long do you need to wait until the ATM decides it's certain that you really own the bitcoin you're trying to cash in?

Indeed. Presumably the ATM has at least a 10 minute delay between accepting BTC and spitting out your money? Otherwise it would seem to be trivially succeptible to double-spend attacks.

The Lamassu machine in Albuquerque does not convert bitcoins to cash, only cash to bitcoins. It won't do a 2-way transaction. Honestly, I don't see why anyone would want to covert BTC to US$ if the vendor (in this case, the bar) accepts bitcoin.

Then I'm not sure what the point of the BTC ATM is. Surely the vendor accepts USD, without the transaction fee or the multiple tens-of-minutes between adding BTC at the ATM and actually being able to pay the vendor (plus the time taken for the vendor to verify the transaction)?

The BTC ATM apparently also accepts a variety of foreign currencies (presumable pesos?); does the rate of Peso use in Albuquerque justify a pseudo-currency-exchange ATM?

have scanners to read government-issued identification such as a driver's license or a passport to confirm users' identities

My driver's license is not associated with my wallet, so it's not really confirming my identity.

Then let's say it's establishing your identity, in connection with a formerly anonymous wallet. Given how often people tout anonymity as a feature, I can't see a lot of hardcore Libertarian users embracing these machines. Really, what is the point of this?

Look to Greece for why a one-currency world economy may not be as utopian as you believe. Their participation in the Euro both exacerbated their borrowing problem and limited the menu of solutions. (Note that I purposefully did not claim it as a cause of their problems.)

The same kind of people who buy their coins at Coinbase, where you use a bank account ACH transfer, Text code to your phone, and possibly credit card as extra verification. In other words, people who don't mind proving their identity because they are not doing anything that requires strong privacy.

Of course, nothing prevents a Localbitcoins reseller from picking up their coins at an ATM or Coinbase, then reselling them for cash in private.

Regarding timing. The machine only converts cash to Bitcoins. So they credit your wallet with Bitcoins, but there's no need to wait for confirmation. You just won't be able to spend your Bitcoins until they finally show up in the block chain. So the ATM transaction can be instant. You might find yourself up at the bar waiting for the transaction to show up in the block chain before you can finally pay your bill, though. (Or did I misunderstand something about Bitcoin?)

Regarding timing. The machine only converts cash to Bitcoins. So they credit your wallet with Bitcoins, but there's no need to wait for confirmation. You just won't be able to spend your Bitcoins until they finally show up in the block chain. So the ATM transaction can be instant. You might find yourself up at the bar waiting for the transaction to show up in the block chain before you can finally pay your bill, though. (Or did I misunderstand something about Bitcoin?)

You missed something that most people don't understand. The bitcoin network forwards valid transactions across the network immediately. Full nodes, who maintain a copy of the block chain, also have a "memory pool" of recently arrived transactions. If you want to spend your new coins, as long as the memory pool contains the transaction adding to the address, the balance for that address will be above zero *at that node*, and a new transaction to spend it may get passed along. It would register as an "unconfirmed input" to the new transaction, but the bartender might accept it if you, for example, show them the ATM receipt.

Another merchant might refuse the transaction until your source of funds was sufficiently "aged". If I was selling a car for bitcoins, I would definitely want the source of the coins to be at least 6 confirmations old, and then wait for some number of confirmations of the purchase transaction before signing over the title.

Regarding timing. The machine only converts cash to Bitcoins. So they credit your wallet with Bitcoins, but there's no need to wait for confirmation. You just won't be able to spend your Bitcoins until they finally show up in the block chain. So the ATM transaction can be instant. You might find yourself up at the bar waiting for the transaction to show up in the block chain before you can finally pay your bill, though. (Or did I misunderstand something about Bitcoin?)

You missed something that most people don't understand. The bitcoin network forwards valid transactions across the network immediately. Full nodes, who maintain a copy of the block chain, also have a "memory pool" of recently arrived transactions. If you want to spend your new coins, as long as the memory pool contains the transaction adding to the address, the balance for that address will be above zero *at that node*, and a new transaction to spend it may get passed along. It would register as an "unconfirmed input" to the new transaction, but the bartender might accept it if you, for example, show them the ATM receipt.

Another merchant might refuse the transaction until your source of funds was sufficiently "aged". If I was selling a car for bitcoins, I would definitely want the source of the coins to be at least 6 confirmations old, and then wait for some number of confirmations of the purchase transaction before signing over the title.

Interesting. You're right that I missed that. But I think my main point stands, right? That you don't have to wait at the ATM. They owe you x Bitcoins sent to your wallet. Assuming the ATM operator is honest, the Bitcoins will eventually get there. And if they are potentially dishonest, it's not clear what benefit would be gained by waiting at the machine.

It is a very attractive little machine right there. It must has been taken months if not years to put this in designing, planning and manufacturing, not to mention it takes months for software and hardware implementation. This do not come in week's work to pull all this stuff together. So this Bitcoin ATM was on the made for at least prior to 2012 or may be much earlier, 2011? Maybe this planning even had started way before Silk Road got itself busted? Before the bust no one knew anything about Bitcoin or even heard of it and even now how many of us know about this Bitcoin? That's something. Must be some big ass backers behind this project.

This reminds me to those cigarettes machines in some European countries where you can only buy cigarettes if you insert your local national ID (you know, to avoid minors getting hands on.....)

Tourists had to ask someone in the street to buy them for them because they can´t !!!

This is one of the reasons why credit cards work so well while traveling. If this is a bitcoin machine I don´t think they should impose such limitations.

You can get cash on any ATM without identification regardless from where your cards where issued.

Actually all cash machines that use a debit or credit card require identification. The purpose of the card is to verify that you are permitted to access the account. A side effect is the transaction is tied to the person(s) authorized to use that particular card.

Requiring a state ID number is exactly the same. You are not required to enter your own, just a valid one. The state may require you to enter the number off your own ID, but that is a different issue.

The ATM has the same requirement ... you are not permitted to allow anyone else to use your debit/credit card. This limitation is usually buried unseen in the service agreement that you were supposed to read.

After all the Snowden revelations, I wouldn't be at all surprised if these BitCoin ATMs had been sponsored by the FBI to help them identify BitCoin account holders, anarchists, drug dealers (or mules), survivalists and anti-federal-government renegades! Of course not all people using these machines would fall into one of these categories (perhaps only the minority would do so); but I expect that a much higher proportion will do so than those performing most other identifiable actions.

Now, it's theoretically possible for someone (Bad Guy) to send the same Bitcoins to 2 people, let it get verified as going to person A (and presumably then get some service from person A like cash or physical goods), then devote his mining hardware to verifying the transaction to person B. The network treats the longest blockchain (history of these verifications) as valid, so to do this attack Bad Guy would have to find a new big number that would solve the equation for the transaction to person B, and then also find the next block, all before the rest of the network found a block building upon the transaction to Person A. If the Bad Guy could do that, the network would think his transaction to Person B is the valid one. That's the "51% attack" on Bitcoin, since you'd effectively need to control 51% of the miners to make it happen.

I enjoyed your post and think it provided good clarity.I just wanted to add my understanding that even if you control 51% of the miners, it is still probabilistic. You would have a 51% chance of confirming a block first. So to confirm 6 blocks in a row you would have a 1.75% (0.51^6) chance of success.Happy to be corrected on this point if I've misunderstood.

Now, it's theoretically possible for someone (Bad Guy) to send the same Bitcoins to 2 people, let it get verified as going to person A (and presumably then get some service from person A like cash or physical goods), then devote his mining hardware to verifying the transaction to person B. The network treats the longest blockchain (history of these verifications) as valid, so to do this attack Bad Guy would have to find a new big number that would solve the equation for the transaction to person B, and then also find the next block, all before the rest of the network found a block building upon the transaction to Person A. If the Bad Guy could do that, the network would think his transaction to Person B is the valid one. That's the "51% attack" on Bitcoin, since you'd effectively need to control 51% of the miners to make it happen.

I enjoyed your post and think it provided good clarity.I just wanted to add my understanding that even if you control 51% of the miners, it is still probabilistic. You would have a 51% chance of confirming a block first. So to confirm 6 blocks in a row you would have a 1.75% (0.51^6) chance of success.Happy to be corrected on this point if I've misunderstood.

Cheers, -=JK=-

No. If you control 51%, you merely vote that the other version of the block chain is incorrect, and that version is deleted from the network. You vote that your version of the block chain is correct, and your version is retained. You still have to find a correct hash using your 51%, but that's just a matter of time. Worst case, it will on average take 20 minutes instead of ten minutes. But since you control everything about the system, you can set the difficulty to ensure you'll find a hash within the appropriate time period.

In a recent article about Bitcoin hacks, it was mentioned that Bitcoin transfers can take an hour because of the number of checks that need to be done. If that is the case, how can an ATM work? Unless I have to stand there an hour, wouldn't they be handing out money before the transaction was confirmed?

[... explanation ...]

But if you're at this ATM with your smartphone trying to turn your $20 into some Bitcoins, you'll see the transaction immediately and can walk away without any issue. In 10 minutes, you'll probably see the transaction has made it onto the blockchain, and as you wait longer it'll get more verifications. If it doesn't, then waiting around the ATM isn't going to make your situation any better; at that point it's time to call whoever owns that thing and try to get your cash back.

But what about the other direction: you're at the ATM with your phone/QR code, and ask for cash (in dollars, presumably). How long do you need to wait until the ATM decides it's certain that you really own the bitcoin you're trying to cash in?

Indeed. Presumably the ATM has at least a 10 minute delay between accepting BTC and spitting out your money? Otherwise it would seem to be trivially succeptible to double-spend attacks.

The Lamassu machine in Albuquerque does not convert bitcoins to cash, only cash to bitcoins. It won't do a 2-way transaction. Honestly, I don't see why anyone would want to covert BTC to US$ if the vendor (in this case, the bar) accepts bitcoin.

Then I'm not sure what the point of the BTC ATM is. Surely the vendor accepts USD, without the transaction fee or the multiple tens-of-minutes between adding BTC at the ATM and actually being able to pay the vendor (plus the time taken for the vendor to verify the transaction)?

The BTC ATM apparently also accepts a variety of foreign currencies (presumable pesos?); does the rate of Peso use in Albuquerque justify a pseudo-currency-exchange ATM?

On that last question, the answer is maybe, but NOT in that location. There are some areas where use of pesos is fairly common, but that area (Nob Hill) simply is not one of them. That doesn't mean that there's isn't exchange city-wide, only that it just isn't that common everywhere.

Regarding timing. The machine only converts cash to Bitcoins. So they credit your wallet with Bitcoins, but there's no need to wait for confirmation. You just won't be able to spend your Bitcoins until they finally show up in the block chain. So the ATM transaction can be instant. You might find yourself up at the bar waiting for the transaction to show up in the block chain before you can finally pay your bill, though. (Or did I misunderstand something about Bitcoin?)

Quote:

"The ATMs will allow people to swap Bitcoin for cash, or deposit cash to buy more Bitcoin by transferring funds to or from a virtual wallet on their smartphones."

It apparently lets you withdraw cash as well, which is surprising considering the size of the ATM.

As a side-note to the ATM's size, what are the odds that one or two of these are going to be stolen once they become more widespread?